HomeContributorsTechnical AnalysisGold Shifts Northwards But Lacks Bullish Signals

Gold Shifts Northwards But Lacks Bullish Signals

Gold kicked off Monday’s session with a soft positive momentum following last week’s consolidation around 1,740 and along the dashed restrictive line, which has been occasionally acting as support to downside corrections over the past two months.

Technically, there is no clear sign that the bulls will take the upper hand in the short term as the RSI is maintaining September’s downtrend below its 50 neutral mark despite the confluence with a former support region, while the MACD remains negatively charged below its zero and signal lines. Meanwhile, the simple moving average (SMA) lines have yet to choose direction, also providing little information about whether the horizontal trading in the short-term window could change soon.

The 1,835 ceiling remains the threshold for short-term traders to confidently resume buying interest, but prior to that, the price will need to overcome the nearby 1,785 – 1,800 resistance territory, where the SMAs happen to be at the moment. If the wall at 1,835 finally collapses, the price could advance to meet the 1,870 barrier, a break of which is required for a rally up to the key 1,900 – 1,916 zone. Any significant move above from here would question the long-term downtrend from the record high of 2,079.

Alternatively, a close below the 1,717 – 1,737 zone could see an extension towards the 1,680 base. Driving lower, the precious metal could chart a new lower low somewhere between 1,640 and 1,600, worsening the long-term bearish outlook.

In brief, gold is trying to recoup some lost ground, but downside risks are still elevated according to technical indicators. Unless the 1,835 bar gives way, an outlook deterioration in the short-term picture cannot be excluded.

XM is a fully regulated next-generation financial services provider of online trading on currency exchange, commodities, equity indices, precious metals and energies, with services to clients from over 196 countries worldwide. Founded in 2009 by market experts with extensive knowledge of the global forex and capital markets and with the aim to ensure fair and reliable trading conditions for every client, XM has reached international recognition by virtue of its unbeatable execution of orders, spreads as low as zero pips on over 50 currency pairs, gold and silver, flexible leverage up to 888:1, and personalized customer engagement to foster clients’ success.

Featured Analysis

Learn Forex Trading